Feds Want Apple and AT&T to Explain Google Voice Rejection (UPDATED)

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Feds Want Apple and AT&T to Explain Google Voice Rejection (UPDATED)

(Updates with resignation of Google CEO Eric Schmidt from the Apple board).

Federal regulators want to know if AT&T and Apple worked to together to reject mobile apps for Google's innovative Voice service, sending letters to the companies asking them to explain this incident and the policies behind the secretive and lucrative iPhone App store.

The letters are the first indication that the feds might be interested in mandating openness for Apple's iPhone store and similar stores run by Sprint, Verizon and even Google. The iPhone store, run through Apple's iTunes software, is the only way an iPhone user can install third-party applications without voiding the phone's warranty.

According to the letters, the FCC wants to know the who, what, why and when of the rejection of the Google Voice app for the iPhone. Google Voice, still an invite-only beta program, lets users channel all their calls through a single Google Voice number which offers cheap international calls, free long distance calls, free text messaging and voicemail transcription - though calls through its mobile app still use the minutes on a mobile phone.

The FCC's new chairman Julius Genachowski made it clear Friday in announcing the letters that he was not pleased by Apple and AT&T's actions, while leaving wiggle room about what, if anything, the feds would do.

"Recent news reports raise questions about practices in the mobile marketplace," Genachowski said in a press statement. "The Wireless Bureau’s inquiry letters to these companies about their practices reflect the Commission’s proactive approach to getting the facts and data necessary to make the best policy decisions on behalf of the American people."

The feds are already looking at mobile phone exclusivity – such as the lock AT&T has on the iPhone in the U.S. – to see if those deals hurt consumers. Outside groups are asking the feds to make mobile carriers adhere the same openness rules that apply to ISPs – e.g. letting them use whatever device, app or online service they want to use.

And here the FCC isn't limiting itself to questions about the Google Voice incident. The FCC also wants to know what other apps have been rejected, what the rules are and what role AT&T plays in such decisions. (Apple letter (.pdf), AT&T letter (.pdf))

The letters say the matter applies to two open matters before the FCC and clearly indicate that the FCC is at least considering whether it should regulate app stores, which are growing in popularity after the breakout success of the iPhone App store.

The Google Voice app – and its unofficial brethren – were not the first to be rejected from sale in the iPhone store for capricious and seemingly unfair reasons. For instance, AT&T said it expected Apple to reject a Skype application that would let users make internet phone calls using the phones' 3G data connection. Apple also forced Slingbox to cripple its video streaming application so that it would only work over WiFi, and not a mobile carrier's network – that despite promoting a Major League Baseball app that would be an even heavier burden on the network.

The FCC is clearly very curious about such activities:

Are there any terms in AT&T’s customer agreements that limit customer usage of certain third-partyapplications? If so, please indicate how consumers are informed of such limitations and whether such limitations are posted on the iTunes website as well. In general, what is AT&T’s role in certifying applications on devices that run over AT&T’s 3G network? What, if any, applications require AT&T’s approval to be added to a device? Are there any differences between AT&T’s treatment of the iPhone and other devices used on its 3G network?

Google was caught off guard by the firestorm of criticism that engulfed Apple and took pains to say that it was still good friends with Apple, despite being disappointed by the rejection. Google's app store for Android phones itself does not allow T-Mobile users to download apps that allow them to use their phones as modems – a technique known as tethering.

For its trouble, the FCC also dropped a letter (.pdf) on Google, asking what happened with the Google Voice app rejection.

Not surprisingly, the feds also want to know what Android apps Google has rejected and why.

The FCC wants replies from all three tech giants by August 21, and says that it will not accept replies wrapped in total secrecy, but will allow some information to be submitted under seal.